RATING RATIONALE
07May2021
Greenland Hospital and Research Centre Pvt. Ltd.
Brickwork Ratings affirms the ratings for the Bank Loan Facilities of Rs.7.00Crs. of Greenland Hospital and Research Centre Pvt. Ltd.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (15 Jan 2021) |
Present | ||
| Fund Based | 7.00 | 7.00 | Long Term |
Provisional BWR B
Assigned |
BWR B
/Stable Affirmation |
| Grand Total | 7.00 | 7.00 | (Rupees Seven Crores Only) | ||
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
RATING ACTION / OUTLOOK
Provisional rating of BWR B was assigned on 15th Jan, 2021 based on the proposed bank loan facilities and now BWR has affirmed the long term rating as BWR B with “Stable” Outlook for the bank loan facilities of Greenland Hospital and Research Centre Pvt Ltd, as loan was sanctioned and subsequently disbursed.
The rating draws strength from the experience of the management and moderate financial profile. However, the rating is constrained on account of regulatory risk, Project implementation risk and competition in the industry.
BWR believes that the business risk profile of “Greenland Hospital and Research Centre Pvt Ltd” will be maintained over the medium term. The Stable outlook indicates a low likelihood of rating change over the medium term. The Rating outlook may be revised to “Positive” in case there is significant improvement in revenues and profit margins of the company going forward. The rating outlook may be revised to “Negative” if there is any deterioration in the financial risk profile including liquidity of the company.
KEY RATING DRIVERSCredit Strengths:
-
Management Experience :
Hospital is managed by well experienced and qualified directors and doctors having more than 7 years of experience in the field of Hospital Speciality Services. It helps them to maintain a better relationship with their customers and suppliers as well.
-
Moderate Financial Profile :
Total operating income has increased from Rs.2.74crs in FY19 to Rs.4.87crs in FY20 which indicates a yoy increase by 77%. Tangible Net Worth has increased from Rs.0.55crs in FY19 to Rs.1.44crs in FY20 [Analyzed TNW has also increased from Rs.0.56crs in FY19 to Rs.1.56crs in FY20]. Operating profit margin has increased from 25.44% in FY19 to 33.43% in FY20 and Net Profit Margin has also increased from 9.60% in FY19 to 18.35% in FY20. ISCR has increased from 6.72x in FY19 to 16.71x in FY20 due to an increase in operating profits and DSCR has also increased from 2.27x in FY19 to 6.14x in FY20. Debt Equity Ratio is improved from 1.65x in FY19 to 0.68x in FY20. TOL/TNW is also improved from 2.42x in FY19 to 0.97x in FY20. Current ratio increased from 0.33x in FY19 to 0.47x in FY20.
Credit Risks:
-
Regulatory Risk :
Healthcare industry is exposed to high Regulatory risk where the industry have to maintain the standards, quality of services and prescribed procedures under the government guidelines.
-
Project implementation risk :
Hospital is executing construction projects for expansion wherein completion of the project in time is key issue. The execution in time always remain challenging and execution of the project is affected by internal as well as external factors.
-
Competition in the industry :
Hospital is exposed to intense competition within the healthcare industry where entry barriers are low limiting the pricing power and resulting in low profitability.
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Going forward, the ability of the firm to improve its financial risk profile and maintaining adequate liquidity will remain the key rating sensitivities.
Positive: Rating may be upgraded in case of substantial improvement in revenues and profit margins of the firm, or on account of any other favorable factor.
Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the firm including the liquidity of the company or on account of any unforeseen unfavorable events.
LIQUIDITY INDICATORS - Adequate
Hospital had cash and cash equivalents balance of Rs.0.18crs as on FY20. It has outstanding long Term Borrowings of Rs.0.98crs in FY20 which includes HDFC Term Loan of Rs.0.54crs & SBI Car loan of Rs.0.20crs and unsecured loans from directors of Rs.0.23crs. Cash Flow Statement for FY20 was not available. There is no average utilization as hospital is not having any working capital facilities. Current ratio stood at 0.47x as on FY20. It has ISCR and DSCR of 16.71x and 6.14x in FY20.
Holding/Subsidiary Company: NA
ABOUT THE ENTITYGreenland Hospital & Research Centre Private Limited is a private limited company incorporated on 29th August, 2013 under the “laws of India” having its registered office situated at Karim Nagar, Chargawa, Gorakhpur, U.P. It is a Super Multispeciality Hospital incorporated with the aims & objectives to cater the opportunities in the “Health-Care” sectors along with the motive to provide hospitality service to poor and rural area. Currently, hospital is managed by Dr. D.K Gupta who is a vice chairman and Dr. Vijay Ranjan who is a M.D & CEO along with Mrs. Ragini Gupta and Mrs. Vrinda Devi. Hospital is not National Accreditation Board of Hospitals (NABH) certified, though consultants are already appointed for the same.
Hospital has around 3 in-house doctors on roll along with 10 visiting doctors, 7 nursing staff and 43 other support staff with average experience of the doctors of more than 5 years. It is a 30 bedded Multi Specialty Hospital providing with services of ICU, Pharmacy, Emergency wards, Pathology, Nebulizer services, ECG, Colposcopy, Well Woman Clinic, Menopause Clinic, Ultrasound services etc. It also comprises of following departments- Obstetrics and Gynecology, IVF Centre, Pediatrics, General Medicine & Surgery, Orthopedics & Trauma, Ear, Nose & Throat, Neurology, Critical Centre, Cardiology, Urology, Ophthalmology and Physiotherapy.
Presently Greenland Hospital & Research Center Private Limited successfully running its business activity at Rented premises at Karim Nagar, Pokhar Bhinda, Chargawa, Gorakhpur. The management has decided to expand the facilities for their members and public at large to implement new technology along with facilities such as waiting hall, cafeteria etc. So they have decided to shift their hospital at New Premises named as GREENLAND SWATHYA BHAWAN a seven storey building with 2 basements near to BRD medical college Gorakhpur. The project will be set up in aprox.11780sqft of land which is owned by Director. The cost of the project is Rs.11.47crs with finance required of Rs.7crs. The implementation of the project work has started from February 2020 which will be completed by May 2022 and business activities to commence from June 2022.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 4.87 | 2.74 |
| EBITDA | Rs.Crs. | 1.63 | 0.70 |
| PAT | Rs.Crs. | 0.89 | 0.26 |
| Tangible Net Worth | Rs.Crs. | 1.44 | 0.55 |
| Total Debt/Tangible Net Worth | Times | 0.68 | 1.65 |
| Current Ratio | Times | 0.47 | 0.33 |
| Key Parameters | Units |
|
|
|---|---|---|---|
| Operating Revenue | Rs.Crs. | Not Available | Not Available |
| EBITDA | Rs.Crs. | Not Available | Not Available |
| PAT | Rs.Crs. | Not Available | Not Available |
| Tangible Net Worth | Rs.Crs. | Not Available | Not Available |
| Total Debt/Tangible Net Worth | Times | Not Available | Not Available |
| Current Ratio | Times | Not Available | Not Available |
NA
STATUS OF NON-COOPERATION WITH PREVIOUS CRA
NA
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)| Facilities | Current Rating (2021) | 2021 (History) | 2020 | 2019 | 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
| Fund Based | LT | 7.00 |
BWR B/Stable
(Affirmation) |
15Jan2021 |
Provisional BWR B
(Assigned ) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| Grand Total | 7.00 | (Rupees Seven Crores Only) | |||||||||
BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.
Hyperlink/Reference to applicable Criteria| Analytical Contacts | |
|---|---|
|
Kartik Ruia Rating Analyst kartik.r@brickworkratings.com |
V.K.Kukreja Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | ||
|---|---|---|---|---|---|---|
| 1 | Term LoanSanctioned | 7.00 | _ | 7.00 | ||
| Total | 7.00 | 0.00 | 7.00 | |||
| TOTAL (Rupees Seven Crores Only) | ||||||
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